The Dollar fell on Friday after a report showed the US economy shed jobs for a third straight month, confirming fears that the country may already be in a recession.
Euro and Yen posted gains against the Dollar after the government said US employers cut 80k jobs in March, more than expected and the biggest monthly fall in five years. The Dollar had recovered most of its earlier losses by late afternoon, however, as traders said the data did not come as a big surprise to a market that has long expected the Federal Reserve to cut interest rates again late this month.
On Friday, EurUsd was up 0.43% at 1.5728, after climbing as high as 1.5774 after the jobs data but ran into aggressive selling at that level. UsdJpy was down 0.91% at 101.46 and UsdChf fell 0.53% to 1.0062.
Analysts said some traders were looking to trim bets in favor of the Euro ahead of a European Central Bank meeting on Thursday. The ECB is expected to hold interest rates at 4%, but a string of recent weak Euro zone data has traders waiting to see if President Jean-Claude Trichet softens his stance on inflation, which could signal a rate cut later this year. Steady euro zone rates at a time when the Fed has slashed US benchmark rates from 5.25% to 2.25% in recent months have boosted the Euro's appeal over the Dollar.
Analysts also said the Euro will probably settle into a 1.5500 1.5800 range this week, though they said the Dollar remained at risk should US economic data worsen or another Wall Street bank fall prey to massive mortgage-related losses. The deteriorating employment situation in the United States also remains a concern, particularly a jobless rate that the government's data on Friday showed jumped to 5.1% from 4.8%.
AudUsd was up a 0.85% at 0.9228 despite an unexpected dip in Australian February retail sales data. UsdCad was up 0.35% at 1.0083 after an early Canadian government report showed that Canada's unemployment rate rose more than expected, fueling expectations for rate cuts from the Bank of Canada.